Digi-Key’s mammoth product distribution center supports steep bookings growth

The 2.2 million square foot facility incorporates densely packed storage and goods-to-person order preparation

By Kevin Parker August 26, 2022
Courtesy: Digi-Key Electronics

It is something of an understatement for Digi-Key Electronics to say that in opening its new product distribution center, the company is expanding its operations, given that the new facility fully triples the company’s footprint to more than three million square feet.

Digi-Key Electronic’s new product distribution center triples the company’s footprint and capacity.

Digi-Key Electronic’s new product distribution center triples the company’s footprint and capacity. Courtesy: Digi-Key Electronics

In fact, the new distribution facility dwarves the original building, and will allow Digi-Key to pick, pack and ship nearly three times the previous daily average of 27,000 packages to customers in more than 180 countries around the world.

Thief River Falls, MN-based Digi-Key prides itself in saying it offers the world’s largest selection of electronic components and automation products, in stock for immediate shipment.

The facility opening comes with record growth for the company. Digi-Key grew 65% in 2021, and even company management expressed surprise that, given current economic conditions, bookings increase continued in 2022 at a rate of more than 25% growth over last year. Since the new facility’s construction began in 2018, Digi-Key has added 1,500 suppliers and 1.5 million part numbers to inventory.

The August 17th ribbon-cutting ceremony included ceremonial first package handoffs to each of the company’s four carrier partners: DHL, FedEx, UPS and USPS.

“This is a significant milestone for all Digi-Key employees and our community,” said Dave Doherty, president of Digi-Key. “For Digi-Key it means deeper roots in Thief River Falls and a commitment to continue investing in this community and the state of Minnesota.”

Remade processes

The new facility incorporates important advances in warehousing automation strategies, including goods-to-person order preparation and the kind of densely packed storage appropriate for the relatively small electronic components that Digi-Key stocks for immediate availability for its customers.

The new Digi-Key facility incorporates goods-to-person order preparation and densely packed storage.

The new Digi-Key facility incorporates goods-to-person order preparation and densely packed storage. Courtesy: Digi-Key Electronics

“If everything was stocked on shelves as with most warehouses, this facility would have to be two or three times bigger than it is already,” said Jeff Poulos, VP, order fulfillment operations, Digi-Key.

With goods-to-person order preparation, products are delivered to the operator by means of automated systems. Operators receive the items required to prepare an order at their pick stations without the need to move from their post.

“The difference is night and day. It was typical for pickers to walk 8 to 10 miles a day,” said Cody Huschle, director, order fulfillment, Digi-Key. “Goods-to-person is safer, and two or three times as efficient, while eliminating human error.”

The product distribution center building was designed by Minnesota-based Widseth, and McShane Construction served as general contractor on the project. KNAPP, a leader in warehouse logistics and automation, partnered with Digi-Key on the internal automation and operational equipment. Manhattan Associates provided software.

Digi-Key officially opened its Product Distribution Center expansion with a Digi-Reel cutting and ceremonial package handoffs. Pictured: Chris Lauer, vice president, order fulfillment, Digi-Key; Thief River Falls Mayor Brian Holmer; Dr. Ron Stordahl, owner, Digi-Key; Dave Doherty, president, Digi-Key; Minnesota Department of Employment and Economic Development Commissioner Steve Grove; and Ramesh Babu, CIO, Digi-Key.

Digi-Key officially opened its Product Distribution Center expansion with a Digi-Reel cutting and ceremonial package handoffs. Pictured: Chris Lauer, vice president, order fulfillment, Digi-Key; Thief River Falls Mayor Brian Holmer; Dr. Ron Stordahl, owner, Digi-Key; Dave Doherty, president, Digi-Key; Minnesota Department of Employment and Economic Development Commissioner Steve Grove; and Ramesh Babu, CIO, Digi-Key. Courtesy: Digi-Key Electronics

“The state of Minnesota is thrilled to celebrate Digi-Key’s growth milestone today,” said Steve Grove, commissioner of Minnesota DEED. “The opening of this facility is made possible by local and state economic support which will contribute an additional $500 million in economic output, as well as the addition of more than 1,000 new jobs.”

Length and breadth of the distribution center

The product distribution center expansion features two primary conveyor systems for redundancy in the case of a breakdown and provide opportunities for future growth. There are over 27 miles of automated conveyor belt in the new facility, and an average order will travel more than 3,200 feet inside the building.

The building features six backup diesel engines and pumps along with a water tank built for fire suppression. It has its own storm sewer and run-off ponds to preclude contributing to any flooding or storage concerns in the community.

In the Skybridge connecting the original Digi-Key distribution center to the expansion building there is a “Digi-Walk” mapped out from end to end, offering a great place for employees to get in some extra steps during breaks.

The roof has a white membrane to reflect the sun’s heat, sensor-activated LED lights to minimize electricity usage, and a specially designed conveying system which maximizes energy usage as well as efficiency.

As a leader and innovator in high-service distribution of electronic components and automation products, Digi-Key provides more than 13.4 million components from over 2,300 quality name-brand manufacturers for immediate shipment.

Digi-Key also supports design engineers and procurement professionals with a wealth of digital solutions, services and tools.


Author Bio: Senior contributing editor, CFE Media